Posts Tagged ‘property value’

Were Your Investments Insured

While I’m using the twin natural disasters that recently impacted the east coast as a springboard, everyone should give some thought to their property insurance coverage. You’ve seen the pictures on television of the recent flooding caused by hurricane Irene and many of you felt the ground shake from the totally unexpected east coast earthquake.

I hope you your family and your real estate investments came through it unscathed. However, if the damage had been more wide spread, do you have enough insurance to repair your investment properties? Both flood and earthquake damage require policies separate from the basic hazard insurance.

Where both natural disasters occurred are rare occurrences for the people living there. Basic insurance would have covered the wind damage from the hurricane but no flood or earthquake damage.

If you don’t know how much coverage you have, now is the time to pull out your policies and read them. If you decide you need more coverage, now is also the time to put it in place. You won’t be getting any advance warning before the next earthquake. And once the national weather service announces a hurricane is forming, insurance companies stop writing new policies or increasing existing policies.

The cost of flood insurance depends if it is in a designated flood zone or not. A basic policy outside of a flood zone typically starts at about $200 a year. Most earthquake insurance for the east coast starts at around 50¢ per $1,000 of property value.

If you don’t want to take out earthquake insurance, you might want to study up a little on what you can do to minimize possible damage. On the more earthquake prone west coast, insurance companies require a few structural improvements be made before they will insure a house. One is strapping the hot water tank to a wall. Another is bolting chimneys to the house walls. Stick built structures can also have walls better secured to the foundation.